County rocks the boat over Cross-Bay Ferry agreement

Just one year into a four-year agreement, Pinellas Commissioners are considering terminating the county’s contract with the Cross Bay Ferry to adopt modifications that would decrease subsidies, increase public transportation aspects and provide a plan for electrification of the boats.

During Thursday’s work session, county commissioners were unanimous in their view of the ferry as a valuable community asset. However, Administrator Barry Burton noted county subsidies were only to help the ferry service and its operator – HMS Ferries – get off the ground and into the water.

In light of a record 53,500 passengers taking the ferry across the bay in its fifth season of operation, which runs from October to May, county officials now want to reevaluate funding and future operations.

“The idea of a subsidy was to get them up and running,” said Burton. “Now they’re up and running – they’re having their best season ever.”

Burton explained a notification requirement is part of the interlocal agreement between Pinellas and Hillsborough Counties, Tampa, St. Petersburg and HMS Ferries. The county must state its intent to withdraw from the contract by June 1 and establish a new agreement by Aug. 1.

Burton also bemoaned the process surrounding the current agreement.

“We entered into the contract last year that we read about in the paper being approved across the bay,” he said. “That’s not the right way to do this.”

According to data provided by HMS, 43% of passengers originated from Pinellas County. Hillsborough county – which often takes the lead in the decision-making process – accounts for 34% of riders. Visitors comprise 19% of passengers, and 5% originate from the greater Tampa Bay region.

St. Petersburg accounted for 58% of the Pinellas ridership, with St. Pete Beach a distant second, at 8%.

Subsidies are split evenly between the two counties and the cities of Tampa and St. Petersburg. In the fiscal year 2023, the four partners will each provide $190,000 for a total subsidy of $760,000 over a nine-month season. The duration of operations annually increases by one month until the final year of the agreement, FY25, when the ferry will operate year-round.

Forecast models show that with an average ticket costing $11.16 and a local government subsidy of $760,000, HMS would incur a profit of $375,375 in FY23 – not including revenue from concession sales, charters and sponsorships.

According to county models, if HMS capped the average ticket price at $11.75 – the agreement states HMS must keep the average cost below $12 – and received no government subsidies, the company would net a profit of $9,375 in FY23 and $56,313 in FY24.

“If we just do a basic job of sponsorship with advertising, that builds in a cushion that could easily make this type of model work,” said Burton.

The current, 149-passenger Cross-Bay Ferry docked at the Vinoy Basin in St. Pete. Photo by Veronica Brezina.

County Attorney Jewel White noted that HMS is working with a consultant to explore sponsorship and marketing programs for the service, which could alleviate the number of subsidies needed and was a key part of commission discussions.

Jill Silverboard, deputy county administrator, said HMS plans to annually increase ticket prices by $2 over the remaining three years of the agreement. In FY25, HMS projects an average ticket cost of $15.16, and each of the four partners will contribute $255,000 in subsidies for a total of $1.02 million over the year.

She relayed that per the agreement, 50% of revenues are split between the four governments – after profits reach a $400,000 threshold.

In addition to debating the county’s responsibility to subsidize operations, Commissioner Janet Long shared her concern about environmental planning for the ferry.

“I didn’t hear anything at all in your presentation that spoke to any progress, conversation or research that’s being done to electrify these boats,” she said. “I keep hearing, ‘we’re not there yet, the technology isn’t there,’ but I’ve read other articles that state that the technology is there.”

Silverboard replied that officials are focusing on securing a Department of Transportation grant to purchase a new ship, and the technology is still evolving. Burton then reiterated that Hillsborough County took the lead on acquiring the next ferry.

Long, like many officials, said that she supports the ferry and the concept but will not support any future agreements unless the county administration presents documentation that signals a path towards electrification of the service. Long added that when she was first approached about the service, the ferry was supposed to provide public transportation and alleviate the number of cars on local roads.

According to HMS data, 85% of passengers rode the ferry on the weekends, and riders crossed the bay for leisure.

“I did hear you (Silverboard) use the word ‘aspirational’ when you first made the presentation to us a year ago,” said Long. “And there’s nothing aspirational about this, in my mind, if we’re not looking at public transportation … and we’re not focused on electrifying these boats.

“Now that we’re up to our eyebrows in it, all of a sudden that’s off the table – and I don’t think that’s good enough.”

Long said she agreed with Commissioner Dave Eggers, who said the county should immediately terminate the agreement and institute modifications.

Burton told the commission his department would begin addressing the issue the next day (today). The county must agree on modifications, terminate the agreement and renegotiate over the next three months.